AP v HMRC (TC) (Tribunal procedure and practice (including UT) : tribunal jurisdiction) [2014] UKUT 182 (AAC)

UKUT-AAC
AP v HMRC (TC) (Tribunal procedure and practice (including UT) : tribunal jurisdiction)
[2014] UKUT 182 (AAC) · 2014-03-26
[1]The Regional First-tier Tribunal Judge has made a reference to the Upper Tribunal under the terms of rule 7(3)(e) of the Tribunal Procedure (First-tier Tribunal) (SEC) Rules 2008. It is dated 18 March 2014. The referral is in the following terms:
“This referral relates to an appeal against a decision of HMRC dated 22/10/2012 where the respondents have failed persistently to provide a response to enable the appeal to be listed. A copy of the Decision Notice of the Tribunal held on 03/03/2014 in Edinburgh is attached which sets out the sequence of events. The respondents have been given warning of the powers under Section 25 of the Tribunals Courts and Enforcement Act 2007 in the directions of 03/03/2014 to refer the matter to the Upper Tribunal which may find them in contempt of court. Two weeks have elapsed since the issue of these directions and there has been no response. I now invoke this provision without further notice in view of the persisting failure. Under the terms of Rule 7(3)(e) of the First-tier Tribunal (Social Entitlement Rules) (Procedure) Rules 2008 I am referring this appeal and ask the Upper Tribunal to exercise its power under Section 25 of the 2007 Act in relation to the respondent’s failure to comply with a requirement imposed by the Tribunal, that is, to produce a document, namely the response relating to this appeal as required by rule 24. I am mindful of the recent decision of the Upper Tribunal in CSTC/937/13 (28.2.14). Although it was not necessary to determine the point in that case, the Upper Tribunal Judge queried whether the failure of the respondent to produce a response is covered by “Regulations (sic) 7(3)(e)” of the 2008 Rules. He observes that “A response to an appeal … is arguably a submission in which has to be prepared (sic) and not a document which is in existence and therefore may not be covered by the rule.”
I would observe however that rule 7(3)(e) refers a failure to ‘produce’ a document. ‘Produce’ is not defined in the 2008 Rules but is capable as a matter of language of including ‘bring into existence’ as well as ‘bring forward for inspection’. The response is itself a ‘document’: see the wide definition of ‘document’ in rule 1(3) (“anything in which information is recorded in any form … “). It must be accompanied by other prescribed ‘documents’: see rule 24. That the response will be a document which will include written ‘submissions’ (not defined in rule 1, but cf. rule 15) does not, to my mind, take it out of the scope of rule 7(3)(e), Such a reading as the Upper Tribunal Judge suggests, moreover, may be unduly narrow. It would arguably deprive the appellant in this case of an effective remedy. A Tribunal which has no power to enforce its orders is also arguably not compliant with Article 6 of the European Convention on Human Rights. Accordingly, and notwithstanding the decision in CSTC/937/13, I consider it appropriate to make a reference under rule 7(3)(e) in this case. Authoritative guidance on this matter may be appropriate, particularly given the admitted systemic difficulties on the part of the respondent, and the increasing regularity with which it is failing to comply with the Tribunal’s directions in cases of this sort. The Chamber President has given me delegated powers in order to make this referral by instrument of delegation dated 21/01/2014. A copy of this referral is also to be sent to Mr Nick Lodge, HMRC Commissioner, Director General, Benefits and Credits, Tax Credit Office, 100 Parliament Street, London SW1A 2BQ”.[2]The circumstances giving rise to the referral are set out in a Decision Notice of the First-tier Tribunal Judge dated 3 March 2014. That Decision Notice is in the following terms: “1. On 22.10.12 the respondent decided that the appellant was not entitled to tax credits. She appealed on 2.11.12. By 20.9.13, and notwithstanding requests and reminders, the respondent had failed to provide a submission for the Tribunal in support of its decision. The appellant therefore referred the matter to the Tribunal for directions. 2. On 18.10.13 the Tribunal directed the respondent to produce a submission within 21 days. It failed to respond to that direction.[3]On 8.1.14 I directed an oral hearing, and directed the respondent to ensure the attendance of a presenting officer. I put the respondent on notice, in particular, that continuing failures to comply with the directions of 18.10.13 and/or to ensure the attendance of a presenting officer at the hearing might cause the Tribunal to refer the matter to the Upper Tribunal under rule 7 of the Tribunal Procedure Rules 2008 with a request that it exercise its powers under section 25 of the Tribunals Courts and Enforcement Act 2007.[4]When the appeal called today the respondent had still not complied with the direction of 18.10.13. Nor was a presenting officer present. There was no explanation for these failures to comply with the Tribunal’s directions. As discussed with the appellant’s representative this appeal cannot sensibly proceed without an understanding of the respondent’s position and the evidence on which it is based. The respondent has failed to provide this. It should go without saying that this failure is unacceptable and a clear breach of the respondent’s obligations under the Tribunal Procedure Rules.[5]Sadly the failures in this case do not appear to be an isolated incident. I am aware of another case (reference SC100/13/1083) in which a reference has been made to the Upper Tribunal in relation to this respondent. I made the appellant’s representative aware of the terms of the respondent’s response to the Upper Tribunal in that case.[6]In all the circumstances I consider that it would be appropriate to refer this case to the Upper Tribunal, and that it consider exercising its powers under section 25 of the Tribunals Courts and Enforcement Act 2007 in relation to the respondent’s failure to produce a submission in support of its decision of 22.10.12.[7]Reference of a case from the First Tier Tribunal to the Upper Tribunal is reserved to the Regional Tribunal Judge, to whom this power has been delegated in Scotland by the Chamber President: see paragraphs 9 and 10 of the Senior President of Tribunals Practice Statement, issued pursuant to the First Tier Tribunal and Upper Tribunal (Composition of Tribunals) Order 2008. I therefore direct the clerk to forward the file to the Regional Tribunal Judge for consideration.” 3. The First-tier decisions notice which prompted the reference is dated 18 October 2013 and is “ ….. By virtue of the powers conferred by Rule 5(2) of the Tribunal Procedure (First-tier Tribunal) (Social Entitlement Chamber) Rules 2008 the Tribunal makes the following directions that it considers desirable for the just, effective and efficient conduct of the above appeal. The Tribunal directs that the respondent will produce and send to the Tribunal Service a submission in respect of this appeal ….”. 4. There was a second First-tier decision notice which is dated 8 January 2014. It is in the following terms: “1. On 18.10.13 The Tribunal directed that the respondent produce and send to the Tribunal Service a submission in respect of this appeal, and to do so within 21 days of issue. The respondent has failed to comply with this direction. 2. The appeal should be set down for an oral hearing, 40 minutes duration, before a District Tribunal Judge, sitting alone. 3. The respondent is directed to ensure the attendance of a presenting officer at the hearing. 4. The respondent is put on notice that should it continue to fail to comply with the direction of 18/10/13, and/or fail to comply with the direction in paragraph 3 above:a. The respondent may be barred from further participation in the appeal: Tribunal Procedure (First Tier Tribunal) (Social Entitlement Chamber) Rules 2008, rule 8(3), (7).b. The Tribunal may, at the hearing, draw inferences adverse to the respondent;c. The Tribunal may consider referring the matter to the Upper Tribunal under section 25 of the Tribunals Courts and Enforcement Act 2007 and rule 7 of the 2008 Rules; and/ord. The Tribunal may refer the file to the Regional Tribunal Judge with an invitation for he to raise the matter administratively with the respondent’s senior officials or to take such other action as she sees fit.” 5. Regulation 5 of the Rules to which I have referred makes provision as follows: “5 …. (2) The tribunal may give a direction in relation to the conduct or disposal of proceedings at any time, including a direction amending, suspending or setting aside an earlier direction. (3) In particular, and without restricting the general powers in paragraphs (1) and (2), the tribunal may - ….. (b) permit or require a party or other person to provide documents, information, evidence or submissions to the tribunal or a party; …..” 6. It is not disputed that Her Majesty’s Revenue and Customs are respondents in the appeal to the First-tier Tribunal in this case. 7. Section 25 of the 2007 Act gives the Upper Tribunal under 25(1(b) the same powers, rights and privileges and authorities the Court of Session. In relation to the matters mentioned in subsection (2) these matters are defined as amongst other things the production and inspection of documents and (c) all other matters incidental to the Upper Tribunal’s functions. Subsection 1 of section 25 of the Act does not limit any power to make tribunal procedure rules.[8]Paragraph 7(3) of the Upper Tribunal rules provides that paragraph (4) applies where the First-tier Tribunal has referred to the Upper Tribunal a failure by a person to comply with the requirement imposed by the First-tier Tribunal to produce a document. Paragraph (4) provides that the Upper Tribunal may exercise its power under section 25 of the 2007 Act in relation to such non-compliance as if the requirement has been imposed by the Upper Tribunal.[9]It is I think significant that in regulation 5 the case management powers, to which I have referred and quoted above, can require a party or another person to provide documents, information, evidence or submission to the tribunal or a party. However paragraph 7(3), which sets out the scope for referral, does not encompass the making of a submission. The regulation is in the following terms: (3) The tribunal may refer to the Upper Tribunal, and ask the Upper Tribunal to exercise its power under section 25 of the 2007 Act in relation to, any failure by a person to comply with the requirement imposed by the tribunal –(a) To attend at any place for the purpose of giving evidence;(b) Otherwise to make themselves available to give evidence;(c) To swear an oath in connection with the giving of evidence;(d) To give evidence as a witness;(e) To produce a document; or(f) To facilitate the inspection of a document or any other thing (including any premises). The original direction which gave rise to the reference namely the one of 18 October 2013, specifically directs the respondents to produce and send to the tribunal a submission in respect of the appeal. The respondents were not required by that direction to produce a document. Clearly, notwithstanding the District Tribunal’s Judges view on the matter, the rules have made a distinction between a submission and a document. I am justified in this view because when rule 7(3) is read as a whole the emphasis is on evidence whether oral or documentary. Thus the respondent’s failure was a failure to obtemper a direction to produce a submission in the appeal. That failure is not encompassed within the powers of the First-tier Tribunal to make a reference to the Upper Tribunal in terms of regulation 7(3). I note that “document” in rule 1 is defined as meaning anything in which information is recorded. However a submission requires an act of preparation. If there is no information recorded in that form there cannot be a “document” covered by the rules. In rule 24 provision is made for responses and replies which sets out obligations on the decision maker which in this case is Her Majesty’s Revenue and Customs who are respondents. There is in this rule when setting out the requirements imposed by it a clear distinction between documents and submissions. I refer in that connection to regulation 24(4) to (7) which provides: (4) The decision maker must provide with the response – (a) a copy of any written record of the decision under challenge, and any statement of reasons for that decision, if they were not sent with the notice of appeal; (b) copies of all documents relevant to the case in the decision maker’s possession, unless a practice direction or direction states otherwise; and (c) in cases to which rule 23 (cases in which the notice of appeal is to be sent to the decision maker) applies, a copy of the notice of appeal, any documents provided by the appellant with the notice of appeal and (if they have not otherwise been provided to the Tribunal) the name and address of the appellant’s representative (if any). (5) The decision maker must provide a copy of the response and any accompanying documents to each other party at the same time as it provides the response to the Tribunal. (6) The appellant and any other respondent may make a written submission and supply further documents in reply to the decision maker’s response. (7) Any submission or further documents under paragraph (6) must be provided to the Tribunal within 1 month after the date on which the decision maker sent the response to the party providing the reply, and the Tribunal must send a copy to each other party.[10]In these circumstances having determined that a submission in an appeal is not encompassed by regulation 7(3) I decline to entertain the reference. I remit the matter back to the First-tier Tribunal to proceed as accords with the appeal before it. (Signed) D J MAY QC Judge of the Upper Tribunal Date: 26 March 2014

Cited in 1 later judgment